Posts Tagged ‘Auto shopping’

TrueCar founder Scott Painter is promising "sweeping changes" to the site's business model.

Scott Painter has never been one to readily yield to his critics, but with state regulators taking aim and a series of huge legal battles looming across the country, the Internet car sales pioneer has backed down, announcing “sweeping changes” to the way his latest venture, TrueCar.com, operates.

The service has generated significant buzz – and plenty of traffic – since its launch, promising to provide consumers with what it has claimed to be the most accurate pricing data online. Dealers, in turn, were provided an alternative model to attract customers. Instead of paying for leads, as is the case with most online auto sites, they only paid a $300 fee whenever a car was actually sold.

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TrueCar’s approach has generated strong support in some quarters – but plenty of criticism elsewhere. And angry dealers, always a force to be reckoned with, were able to rally support in a number of states where TrueCar appeared to be running afoul of strict franchising laws. Notably, states like Texas and Virginia bar so-called “bird-dogging,” or auto brokering, where a third party steps in to help a customer get a better price.

A new study suggests that the automotive retail experience is undergoing significant change.

Product, product, product? Perhaps, but even the best vehicles won’t sell unless dealers know how to work with their customers, and according to a new study, Mercedes-Benz leads the way when it comes to doing the best job on the showroom floor.

Not surprisingly, luxury makers lead the way when it comes to satisfying customers during the shopping experience, according to the latest annual Pied Piper Prospect Satisfaction Index, which uses a cadre of “mystery shoppers” to see how dealers across the country perform. Lexus ranked second, in the PSI, with Land Rover, Acura and Jaguar rounding out the Top Five.

But Detroit brands lead the way, in the 2010 study, when it comes to improving the way their dealers work with customers. Ford, Lincoln and Chevrolet all scored above industry average for the first time since the study was launched, four years ago. In fact, Chevy was the only mainstream brand in the Top Ten, followed by Ford and Honda.

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“Overall industry performance improved notably from 2009 to 2010, with 25 of the 34 major auto brands achieving higher PSI scores,” said Fran O’Hagan, CEO of California-based Pied Piper Management. But he added that, “Despite the continual improvement in how cars are sold, there is still plenty of room for improvement, although not necessarily in the expected areas.”

If the latest survey from Consumer Reports is accurate, 73% of car buyers said they were “somewhat” or “very likely” to purchase the same make they currently drive the next time they shop for a new car.

However, if they were to change brands, most respondents said that higher quality, better fuel economy, and a lower price are the three biggest factors that would influence their decision. There seems to be a return to pragmatism in people’s minds.

“A buyer’s attachment to a brand, for example, can vary significantly by gender and age,” said Jeff Bartlett, Deputy Editor Online, Consumer Reports Cars. “Possible reasons younger drivers could be influenced more readily include changing lifestyles, less experience with a given brand, greater peer influence, and being more trend-conscious.”

Women are notably more likely to be brand loyal than men, with 54% compared to 43% claiming they are “very likely” to purchase another car of the same make as they currently own. The same applies for older drivers. Among drivers 35 and older, at least 50% plan to stay with the brand they already own. Only 41% of drivers aged 18 to 34 years old felt the same. CR also found that household income does not play a role in car brand loyalty. Affluent consumers and those of modest means were nearly equal in their attachment to a brand.

Why buyers switch

When presented with 13 potential factors to entice owners to change their brand allegiance, the top choices were clearly higher quality and better fuel economy, as shown in the following list.

Number one in sales, Maruti Suzuki performs well in persuading 40% of shoppers to purchase.

As Internet use among new-vehicle shoppers in India grows, increasing numbers of buyers are rejecting and selecting specific models before visiting dealerships, according to the J.D. Power Asia Pacific 2009 India Escaped Shopper Study released today.

The study, which analyzes the reasons why consumers consider a vehicle model, but ultimately purchase a different make or model, finds that 69% of new-vehicle shoppers report having visited a dealership in 2009, compared with 82% in 2008. Power interprets this drop as an increasing proportion of vehicle shoppers are rejecting certain models without ever visiting dealerships.

Since web use and web trends are global, differing only in nuance, the latest study has implications for automakers and car buyers in all markets.

The study finds a greater proportion of new-vehicle shoppers use the Internet to find information about makes and models –increasing from 21% in 2007 to 34% in 2009. Technical specifications, vehicle price, vehicle features or accessories, and vehicle brochures/pictures are the topics most frequently researched by new-vehicle shoppers on the Internet.

In addition, the percentage of shoppers who seek information from friends and relatives during the vehicle selection process has increased from 70% in 2007 to 74% in 2009.

Web Shopping!

“Due to the prevailing economic conditions, shoppers are carefully considering and researching their options and are increasingly seeking information from unbiased sources,” said Mohit Arora, senior director at J.D. Power Asia Pacific, Singapore.